The price of aluminium in the global aluminium market is about 10 per cent lower than a year ago, according to the global metal market intelligence firm Metal Index.
The reason for the drop was because of a combination of a strong global supply chain and a slowdown in the price of copper.
The price of a kilogram of aluminium was about $1,500 in November, down from about $2,000 in June, according for Metal Index’s latest report.
“The market has changed, which is the right way to put it, but in the past year it’s actually moved down,” said Metal Index Chief Executive, Paul McDonagh.
“[It] is very difficult to predict the future, because there’s been a lot of volatility in the aluminium market, but the bottom line is that we think the price is probably about 5 to 10 per year lower than it was before.”
The global aluminium price is down almost 40 per cent from a year earlier, according the Metal Index, a benchmark for global aluminium prices.
Despite the drop in the international aluminium market this year, it is still a key market for Australian mining companies.
The price for aluminium was almost $12.7 billion in the first quarter of this year.
In Australia, mining companies have been increasingly moving towards aluminum because of its cost-effective quality and high metal content, said McDonaugh.
“The aluminium we buy at the end of the day is the same quality as a piece of steel, which means it is a very good metal for manufacturing purposes,” he said.
The global metal industry employs about 10,000 people in Australia, according Metal Index figures.
Australia is the world’s third largest aluminium producer and second-largest aluminium exporter, according research firm Wood Mackenzie.
Australia has one of the lowest copper prices in the world.
But aluminium is still the most common metal for Australian metal processing.
A kilogram (kilogram) of aluminium is about 2.2 litres (4.4 US gallons) of refined metal, according Wood Macklenge.
The aluminium that comes out of the aluminium processing plant at Caulfield, north of Perth, costs about $20 per tonne, according with a market price of about $200.
That is about half the price paid for copper.
The Australian metal industry is now worth $2.7 trillion, according a Wood Mackenzie report, which also found the Australian aluminium industry was “the most diversified in the developed world”.
“The industry’s strong performance in recent years is largely down to a strong combination of improved production technology and a growing supply chain,” Wood Mackenies Wood Mackendus Research & Investment Centre said.
Wood Mackenzie also said aluminium’s production was expected to grow by 2 per cent in 2020 and by 6 per cent by 2021.
“This reflects the industry’s focus on improving production efficiencies to support its continued growth and to offset the impacts of the copper price downturn,” it said.
Metal Index has been providing market intelligence for the metal market for over 20 years.